PRACTICAL NO.

Aim :- Explain E-Commerce with its types.

Introduction to E-commerce
E-commerce (electronic commerce) is the buying and selling of goods
and services, or the transmitting of funds or data, over an electronic
network, primarily the internet. These business transactions occur
either as business-to-business (B2B), business-to-consumer (B2C),
consumer-to-consumer or consumer-to-business. The terms e-
commerce and e-business are often used interchangeably. The term
e-tail is also sometimes used in reference to the transactional
processes that make up online retail shopping.

E-commerce is powered by the internet, where customers can access

an online store to browse through, and place orders for products or
services via their own devices.

Types of E-commerce
E-commerce can be classified into 4 main categories. The basis for
this simple classification is the parties that are involved in the
transaction so the 4 basic e-commerce model are as follow:

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 1. Business to Business (B2B)
2. Business to customer (B2C)
3. Customer to customer (C2C)
4. Customer to Business (C2B)

1) Business to Business (B2B):-

Business-to-business (B2B) e-commerce refers to the electronic
exchange of products, services or information between businesses
rather than between businesses and consumers. Examples include
online directories and product and supply exchange websites that
allow businesses to search for products, services and information
and to initiate transactions through e-procurement interfaces.

2) Business to Customer (B2C):-

Here the companies will sell their goods and services directly to the
customer. The customer can browse their website and look at
products, pictures, read reviews. Then they place their order and the
company ship the goods directly to them.

Popular examples are Amazon, Flipkart, Ebay, etc.

3) Customer to Customer (C2C):-

Here the customers are in direct contact with each other no
Company is involved. It helps people to sell their personal goods and
assets directly to the interested party. Usually the goods traded are
cars, bikes, electronic gadgets, etc.

4) Customer to Business (C2B):-

This is the reverse of B2C, it is a customer to business so the
customer provides goods or some services to the company.

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For e.g. an IT freelancer who demo’s & sell his software to a
company. This would be a C2B transaction.

Advantages and Disadvantages

of E-commerce

Advantages of e-Commerce :-
There are a number of prominent and not-so-obvious advantages for
doing business on an online platform. Understanding exactly how e-
Commerce works can help individuals leverage them to their and
their businesses advantage:

1. A Larger Market:

 E-Commerce allows individuals to reach customers all across

the country and all around the world. E-Commerce gives
business owners the platform to reach people from the comfort
of their homes. The customers can make any purchase anytime
and anywhere, and significantly more individuals are getting
used to shopping on their mobile devices.

2. Customer Insights Via Tracking And Analytics:

 Whether the businesses are sending the visitors to their e-

Commerce website via PPC, SEO, ads, or a good old postcard,
there is a way of tracking the traffic and the consumers’ entire
user journey for getting insights into the keywords, marketing
message, user experience, pricing strategy, and many more.

3. Fast Response To The Consumer Trends And The Market

Demands:

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  Especially for the business people who do “drop ship,” the
logistics, when streamlined, allow these businesses to respond
to the market and the trends of e-Commerce and demands of
the consumers in a lively manner. Business people can also
create deals and promotions on the fly for attracting customers
and generate more sales.

4. Lower Cost: 

With the advancement of the e-Commerce platforms, it has

become very affordable and easy to set up and run an e-
Commerce business with a lower overhead. Business people no
longer need to spend a big budget on TV ads or billboards, nor
think about personnel and real estate expenses.

5. More Opportunities For “Selling.”: 

Business people can only offer a limited amount of information

about a product in a physical store. Besides that, e-Commerce
websites give them the space to include more information like
reviews, demo videos, and customer testimonials for helping
increased conversion.

6. Personalised Messaging: 

E-Commerce platforms give people in business the opportunity

to provide personalised content and product recommendations
for registering customers. These targeted communications can
help in increasing conversion by showing the most relevant
content to the visitor.

Disadvantages of e-Commerce :-

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Running a business that is e-commerce is not always rainbows and
unicorns. There are unique challenges to this business model —
learning about them will help business people navigate the choppy
waters and avoid common pitfalls.

1. Lack of Personal Touch:

 Some customers appreciate the personal touch they offer when

visiting a physical store by interacting with the sales associates.
Such personal touch is especially essential for businesses that
sell high-end products as customers will want to buy the
products and have an excellent experience during the process.

2. Lack of Tactile Experience:

 No matter how good a video is made, customers still can’t feel
and touch a product. Not to mention, it’s never an easy task to
deliver a brand experience that could often be including the
sense of touch, taste, smell, and sound via the two-
dimensionality of any screen.

3. Product and Price Comparison:

 With online shopping, customers can compare several products

and find the least price. This forces many businesses to compete
on price and reduce their profit margin, reducing the quality of
products.

4. Need for Access to the Internet:

 This is obvious, but don’t forget that the customers do need

access to the Internet before purchasing from any business! As
many eCommerce platforms have the features and
functionalities which require a high-speed Internet connection
for an optimal consumer experience, there’s a chance that
companies are excluding visitors who have slow internet
connections.

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 5. Credit Card Fraud: 

Credit card frauds are a natural and growing problem for online
businesses. It can lead to many charge backs, which result in the
loss of penalties, revenue, and a bad reputation.

6. IT Security Issues:

 More and more organisations and businesses have fallen prey

to malicious hackers who have stolen information of the
customers from their databases. This could have financial and
legal implications, but it also reduces the company’s trust.

E-Payment Methods

An electronic payment is any kind of non-cash payment that

doesn't involve a paper check. Methods of electronic payments
include credit cards, debit cards and the ACH (Automated
Clearing House) network. The ACH system comprises direct
deposit, direct debit and electronic checks (e-checks).
For all these methods of electronic payment, there are three main types of
transactions:

Credit/Debit card payments:

Payments via cards are one of the most widely used and popular
methods not only in India but on the international level.

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As a global payment solution, by enabling payment acceptance via
cards merchants can reach out to an international market.

Credit cards are simple to use and secure. The customer just has to
enter the card number, expiry date, and CVV, which has been
introduced as a precautionary measure. The CVV helps detect fraud
by comparing customer details and the CVV number.

Coming to debit cards, they can be considered the next popular

method for eCommerce payments.

Debit cards are usually preferred by customers who shop online

within their financial limits. The main difference between credit and
debit card is with a debit card one can only pay with the money that
is already in the bank account, whereas in the case of a credit card,
the spent amount is billed, and payments are made at the end of the
billing period.

Prepaid card payments:

As an alternative for credit/debit cards, prepaid cards are introduced.

They usually come in different stored values and the customer has to
choose from them. Prepaid cards have virtual currency stored in
them. Though the adoption rate of prepaid cards is low, they are
gradually becoming popular for certain niche categories.

Bank transfers:
Though not popular nowadays but still bank transfer is considered as
an essential payment method for eCommerce.

It is considered as ‘if all else fails’ kind of payment method. Some of

the eCommerce stores are also keen on using bank transfer payment
options.

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Customers enrolled in internet banking can do bank transfers for
their online purchases. Bank transfer is the most secure method as
the transactions need to be approved and authenticated by the
customers.

It is a simple way of paying for online purchases and does not require
the customer to have a card for payment purposes

E-Wallets:
E-wallet is one of the upcoming trends which gives a new shopping
experience altogether. The use of e-wallets is becoming popular at
an alarming rate.

E-Wallets require a sign up from merchants as well as customers.

After creating an e-wallet account and linking it to the bank account
they can withdraw or deposit funds.

The whole procedure with an e-wallet is easy and fast. Considered as

an advanced and instant digital payment method, e-wallets can be
integrated with mobile wallets using advanced functionalities like
NFC.

Prepaid e-wallet accounts store customer information and multiple

credit/ debit cards and bank accounts. It needs one-time registration
and eliminates the need for re-entering information every time while
making payments.

Cash:
Let’s face it, in India cash is the king. For eCommerce, it comes in the
form of the cash-on-delivery option.

Cash is often used for physical goods and cash-on-delivery

transactions. It does come with several risks, such as no guarantee of
an actual sale during delivery, and theft. Though nowadays, cash on
delivery does not necessarily mean customers pay with cash (they

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can use cards, mobile payments as payment terminals are often
available with delivery agents), missing out on this is a strict NO.

Mobile payments:

Payment acceptance was no exception for mobile penetration.

This digital payment solution offers a quick solution for customers.

To set up a mobile payment method, the customer just has to
download software and link it to the credit card.

As eCommerce is becoming mobile mainstreamed, customers are

finding it more convenient to use mobile payment options.

Difference between Ecommerce and

Traditional commerce

E-Commerce
Meaning:
E-commerce i.e., electronic commerce is similar to
traditional commerce. It also includes the exchange of goods
and services. The solitary difference is that it is handled online
through an electronic network – the Internet. Now it has spread

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across to online social networks. With e-commerce, support,
transactions and communication are done via the use of
electronic communication. All trading activities including selling,
ordering, buying, payments are executed over the internet.

Usage:

It is used to save valuable time and money.

Process:

It is easier to use and operate if customer have the basic digital

gadget knowledge.

Mode:

It is in electronic and digital mode only.

Time:

It is available round the clock.

Purchase:

Inspecting the product before purchasing is not possible in this

type.

Involvement:

It does not involve face to face involvement of buyer and seller.

Business:

More business can be done without any hassle.

Maintenance:

Easier to maintain this as only warehouse is sufficient to store

goods.

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Traditional Commerce
Meaning:
Traditional commerce includes the exchange of goods and
services between 2 people. As stated in the introduction, it is
one of the traditional methods of purchasing goods and
services. It is followed by everyone across the globe.

Usage:

It is ancient and still in usage where digital mode is not

reached.

Process:

It can be followed by any person irrespective of education and

knowledge.

Mode:

It can be in any form non-electronic or manual form.

Time:

It is available at a limited time as prescribed by the law and

based on the type of the business.

Purchase;

Inspecting a product before purchase is possible in traditional

business model.

Involvement:

It involves face to face involvement of both buyer and seller.

Business:

It is difficult to perform more businesses in this model.

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Maintenance:

It is cost effective as display and showcase of the product is

required to attract more customers.

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